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Sunday, August 09, 2015

The proposed Trans Pacific Partnership (TPP) agreement involving 12 countries in East and West Pacific, final negotiations collapsed last month. Reposting some relevant news and views about the issue. This chart is from FT.com.

Some news reports on the subject. First, this

old but long discussion in the Financial Times (FT).

(1) FT.com, September 22, 2013. "

It is so difficult to envisage all 12 countries
agreeing on such a complex agenda that some commentators have sought another
explanation for the TPP. Many, noting the absence of China, regard it as a
geopolitical club masquerading as a free-trade one. Until recently, editorials
in the official Chinese media regularly thundered against the TPP, describing
it as a plot designed to contain China’s rise...."

"Ironically, the insights of Adam Smith, David
Ricardo, and indeed Paul Krugman, are more relevant than ever. Larger, more
integrated markets raise living standards through increased specialization and
greater competition. The old view of trade in which products are made in one
country and sold in others no longer applies. Instead, goods and services are
now “made in the world,” as final products are assembled using intermediate
inputs from a large number of countries."

"Secretary of State John F. Kerry, in Singapore on
Tuesday, hailed what he called "good progress" made during the
meetings last week. In his speech, Kerry expressed confidence that the trade
agreement will promote economic opportunities and a "stable, rules-based
order for the Asia Pacific."

Deborah Elms, a trade specialist in Singapore, called the
Hawaii meetings a big letdown given the expectations that a final agreement
would be reached.

"In the end, a deal filled with 21st-century
policies on Internet access, advanced pharmaceuticals and trade in clean energy
foundered on issues that have bedeviled international trade for decades: access
to dairy markets in Canada, sugar markets in the United States and rice markets
in Japan.

“No, we will not be pushed out of this agreement,” said a
defiant New Zealand trade minister, Tim Groser, who held out for better access
for his country, the largest exporter of dairy in the world.

Australia, Chile and New Zealand also continue to resist
the push by the United States to protect the intellectual property of major
pharmaceutical companies for as long as 12 years, shielding them from generic
competition as they recoup the cost of developing next-generation biologic
medicines." . http://www.nytimes.com/.../tpp-trade-talks-us-pacific...

(5) ATC, Deborah Elms,

August 1, 2015.

"If I had to put my own finger on it, the immediate
cause of collapse can be traced to Canada’s refusal to discuss dairy in any
meaningful way until the final 3 days of negotiations. This was, as I have
previously noted, a high risk strategy.

I assume officials gambled that, if they waited until the
bitter end, everyone else would be so willing to get a deal done that they
would take whatever poor offer Canada made on dairy liberalization.

The gamble could be taken, in part, because negotiations
over dairy are infinitely more complex and time-consuming than equivalent
difficulties in other sectors. For instance, another problematic issue for
ministers in Hawaii concerned the patent length for biologic medicines. But the
fight over patent length, while serious for participants, could at least be
sorted quickly. The number was gong to be 12, 8, 7 or 5 years of protection.
The choice might be hard, but once made, the final figure could be quickly
slotted into the waiting text."

"Contrary to the critics, the TPP Agreement should
enhance access to medicines, through the economic benefits of greater trade and
growth.

The Trans-Pacific Partnership can ensure that despite the
difficulty, risk and expense of pharmaceutical innovation, firms continue to
invest. International trade agreements such as the TPP set global precedents,
which makes it even more critical that the agreement must ensure that
innovation is protected, that breakthrough therapies are incentivized and that
intellectual property protection is strong and enforced. The protections set
forth in the TPP Agreement shouldn’t be a sticking point. Far from it. They
should be a template for global IP rights that encourage innovation and enhance
global health."http://www.ipwatchdog.com/.../role-of.../id=60283/

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The best free trade agreement (FTA) of course, is one that has the least involvement of governments because only people and corporations trade with each other, not countries or governments. The main function of governments including the multilaterals like the WTO and UN, is to have rule of law internationally, that agreements and contracts between and among companies and trade alliances are respected and enforced, violators are penalized based on transparent and mutually-agreed system of penalties.

We are far from that scenario, so we have to face what are currently existing, like the proposed TPP and other trade agreements.

Of the 10 ASEAN countries, only four were invited in the TPP
-- Vietnam, Singapore, Malaysia and Brunei. I
think among the reasons why only those 4 countries were invited is because
they have little restrictions on foreign investments. Even socialist Vietnam is
more friendly to global capitalism than the PH or Indonesia.

I support the DTI and official government position that the PH
should join the next round of TPP membership expansion. There is little chance
that the PH can have a bilateral FTA with the US, the biggest, most innovative
economy in the planet for the next decade or two. Vietnam and Malaysia will
soon have greater access to the US, Canada markets compared to non-TPP members
in the ASEAN.